Beer storm brewing on Capitol Hill

Posted at 2:59 PM, Feb 11, 2015
and last updated 2015-02-12 08:20:09-05

Craft brew v. big beer is a debate as old as Sierra Nevada, which with a scant 35-year history isn't actually that old, but it's divisive nonetheless. 

You likely know the two camps well: There’s the mustached man who offers his opinion on the latest Dogfish Head pilsner to whomever will listen. Further down the bar, there is the weathered Miller High Life loyalist unabashedly ordering his sixth bottle of the classic lager. One side wants aromatic brew and robust flavor profiles. The other says, “Shut up and drink the beer, dammit.”

Now the craft vs. big beer debate is brewing outside of late-night watering holes (and Super Bowl commercials) and bubbling up in congressional hearings. Unfortunately for our elected officials, they won’t be able to drink beer--craft or otherwise--during the proceedings.

Two conflicting beer excise tax bills have been served this session, the Small BREW (Brewer Reinvestment and Expanding Workforce) Act and the Fair BEER (Brewers Excise and Economic Relief) Act. While, both aim to overhaul a 1986 statute, in practice they are about as similar as a pale ale and a chocolate stout. And as is true with most things beer, different tastes have Congress and the industry split.

Small BREW proposes taxing a producer’s first 60,000 barrels of beer at $3.50 per barrel. The next tier, 60,000 to two million barrels, would be taxed at $16, and anything above that would levy an $18 tax. Fair BEER wouldn’t tax producers who make less than 7,143 barrels and collect a $3.50 tax per barrel on production between 7,144 and 60,000 barrels. The high-output production, or over 60,000, would be taxed exactly like the Small BREW act.

Essentially, there’s a big guy-little guy feud fermenting in Congress.

Almost 90 percent of beer producers in the U.S. wouldn’t be taxed under the Fair BEER Act. Rep. Steve Womack, R-Ark., who introduced the bill in the House, said this reform will promote expansion in both large and small breweries.

“Our tax policies shouldn’t discourage the growth and continued success of an industry that supports jobs for more than two million Americans, and it shouldn’t pick the winners and losers in the market,” Womack said in a statement.  “This comprehensive reform bill supports brewpubs, microbrewers, national craft brewers, major brewers, and importers alike and encourages their entrepreneurial spirit, which is exactly the spirit we need to get America’s economic engine going again.”

The Beer Institute, whose biggest members include Anheuser-Busch, Heineken and MillerCoors, has also thrown support behind Fair BEER. (Not to get off track, but you’ve got to think the Beer Institute would be a fun place to work.)

Sen. Ben Cardin, who introduced the Small BREW bill, reiterated concerns from the craft-brew promoters at the Brewers Association that money saved by big beer producers would largely be reinvested overseas, ultimately hurting  “funky” brewers who want to make beers with names like Genghis Pecan.

“The federal government needs to be investing in industries that invest in America and create real jobs here at home,” Cardin said in a statement. “With more than 3,200 small and independent breweries currently operating in the US, now is the time to help this industry – and our economy - keep growing stronger.”

The Small BREW Act is also supported by the Congressional Small Brewers Caucus, which is a real and hysterical thing. Oh, what a rowdy bunch they must be. Meanwhile, all of this talk of beer makes me want one - my only requirement is that it’s cold. But Congress and the beer community at large seem dead-set on clouding the beer excise tax debate like a Hefeweizen. I guess you can’t make everyone hoppy.

[Also by Abby Johnston: Can Washington weirdness be blamed on Mercury?]

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